What is the expected timeline for the investigation and any potential litigation, and how might that timeline impact shortâterm stock volatility?
Investigation & litigation timeline
Because Pomerantz LLP has only announced the launch of an âinvestigationâ onâŻ16âŻAugâŻ2025, the process is still in its early, factâgathering stage. In comparable securitiesâclassâaction cases, the discovery phase usually runs 3â4âŻmonths, after which the firm decides whether to file a formal complaint. If a complaint is filed, the complaintâfiling deadline (the âsuitâfiling windowâ) is typically 12âŻmonths from the date the alleged misconduct first occurred, but most plaintiffs elect to file within 6â9âŻmonths to preserve momentum. Consequently, market participants can reasonably expect:
| Phase | Approx. Duration | Market impact |
|---|---|---|
| Factâfinding (investigation) | 3â4âŻmonths (midâOctâŻ2025âŻââŻmidâJanâŻ2026) | Elevated uncertainty, widening bidâask spreads, ââŻIV |
| Potential filing of a classâaction suit | 1â2âŻmonths after investigation (lateâŻJanâŻââŻFebâŻ2026) | Spike in volatility as legalârisk premium is priced |
| Early litigation (service, motions) | 3â4âŻmonths (MarâŻââŻJunâŻ2026) | Volatility tapers, but still prone to newsâdriven moves |
Shortâterm volatility outlook
During the investigation window (OctâŻ2025âŻââŻJanâŻ2026) the stock is likely to experience moderateâtoâhigh volatility (VIXâtype measures for TROX could rise 15â25âŻ% above its 30âday average). The market will price in a âlegalârisk premiumâ as investors hedge against the unknown outcome, leading to:
- Wider intraday price swings â especially on any updates from Pomerantz (e.g., ânoâcauseâ vs. âsubstanceâ findings).
- Higher implied volatility on options â premiums on outâofâtheâmoney (OTM) calls and puts will expand, creating opportunities for volatilityâselling or straddle strategies.
If a complaint is filed in lateâŻQ1âŻ2026, volatility will spike again, but the magnitude will be tempered by the fact that the investigationâs findings will already be incorporated into pricing. In the absence of a filing, the volatility premium will gradually decay, and the stock will revert toward its fundamental valuation (ââŻ$X per share based on cashâflow and comparable peers).
Actionable takeâaways
| Trade idea | Rationale | Risk management |
|---|---|---|
| Longâvolatility (e.g., 30âday ATM straddle) | Capture the expected volatility surge during the investigation and potential filing window. | Set a maxâloss stop at 30âŻ% of premium; unwind if the investigation stalls or no filing materializes. |
| Shortâbias with tight stop (e.g., 2â3âŻ% below recent support at $Y) | If you anticipate the legal risk to be overstated and the stock to revert after the investigation period. | Tight stop to protect against a surprise filing that could trigger a rally. |
| Neutralâbias with a calendar spread (sell nearâterm options, buy longerâdated) | Exploit the frontâloaded volatility while maintaining a marketâneutral stance. | Adjust delta exposure as the investigation progresses; roll the short leg if volatility spikes. |
In short, expect 3â4âŻmonths of heightened uncertainty followed by a potential litigationâtriggered volatility spike in earlyâŻ2026. Positioning for a volatility play nowâeither longâvol or a neutral calendar spreadâoffers the best riskâadjusted upside while keeping flexibility for the eventual legal outcome.